Walt, you can't think of Southern California without thinking of Snoop Dogg and Dr. Dre because they keep your heads ringing, and Waymo's keeping the miles ringing. So there's a good thing going on there because Waymo keeps racking up the miles in the Golden State as Dre hits the beats and Snoop drops the lyrics. As they do that, Elon Musk has channeled his inner Gene Wilder. Don't forget, he owned the estate at one time. He wants to be Charlie in the Chocolate Factory. Then it's Thursday, and what happens on Thursday? Autonomous news drops like Dre drops bombs. So let's start with Waymo. Racking up the miles. What do we know about the latest CPUC release?
Well, for two weeks in a row, Grayson, you've got me a bit speechless. I'm not sure what those lyrics were or all those things that you were saying, but I do know we have a lot of Waymo news this week. I want to start with the first thing, which is this data that came out showing that they're doing 1.4 million rides per month in California. I remember reading on Twitter — I love following Twitter every day — great info there. And people talking about growth moderating in California or them not doing well or something like that, maybe share issues. But that growth, Grayson, when you plot it out, is a 10x in two years. I think that's pretty good growth. Wouldn't you say?
I would say it's extraordinary growth. And for your comment on the intro, I don't want an East Coast-West Coast hip-hop battle anymore. So last week we had the Wu-Tang Clan on the East Coast. This week we had Dre on the West Coast. See, we're an equal opportunity podcast. Well, equal opportunity.
I still don't know what you're talking about, but let's get to something I know you can educate me on, which is there is some CPUC approval that Waymo got. Now, whenever I hear CPUC, you know, I'm a telco analyst, and when I hear the letter CPUC, my eyes start to glaze over. I get agitated about it and a frustration because of that organization in general. But I guess, did they — was there some approval that they gave to Waymo this week?
Yeah. What happened was, in a nutshell, in simple terms, Waymo now has the legal authority to operate in 40,000 square miles in the state of California from a driverless commercial perspective. To put that into population perspective, that is roughly 25 million California residents. That is a very large chunk of the state. And US regulatory — not going to put you to sleep — I estimate this is about two years ahead of where the competition is to get here. So if Waymo 10x'd in a year, where are they going to be in two years? That's something to watch there because Waymo officially, I'll say it for the record, has a regulatory moat in the state of California.
Okay, so help me understand this. Because I get kind of confused with all the mayors and governors and I guess now agencies and the feds all claiming or at least stating something and providing some limitations. First of all, they are already operating in California. So were they operating without approval before? Like, what is this? I guess the two questions are: what does this approval really mean, because I thought they were already operating in California? And secondly, like, are they the ultimate arbiter, or does some mayor have some ability to, you know, stop them from doing something in their individual cities or towns?
So with the state of California, it's regulated at the state level. There is no local interference. I said it. There it is. There's no local jurisdiction of what this could do. It's regulated at the state level. There's the California DMV that says that you can operate. And then there's the California Public Utilities Commission, which for us is the most important one, says that you can charge and operate a commercial business without a driver. So what the CPUC did was they granted Waymo the ability or the legal authority to expand their service to charge in more areas. And I'm just going to be me — this includes Napa Valley. So you can go around Napa and drink a ton of wine, have a good time, and ride around in a Waymo. Hypothetically, not saying they're there, but they have approval to operate there.
Okay, so that's good. But so prior to this, did they have CPUC approval in the markets where they were already operating? Because I see listed on here LA, and they were operating in LA.
Yes. And so basically, if you think about it this way, the map expanded outwards. So as everybody knows, California is on the left coast. It borders the Pacific Ocean. And so they've expanded inland in some of these geographies and north and south to some. So basically the map where they can operate just got a lot bigger.
Okay. So, and I'm sorry to have to ask this again, but just so I'm clear, because we are talking about California right now. So obviously I have a lot of skepticism. There's no governor or attorney general that can somehow stop Waymo from executing these markets. The CPUC is the ultimate authority here.
That is correct. And most importantly, Alphabet is not trying to buy a movie studio and merge it with another movie studio. So I do not see any headwinds there.
Well, I gotta say I'm gonna hat tip to California because I've been a little hard on them, as you know, on the LightShed side of things. My partner Rich Greenfield, you know, obviously believes that that transaction has got some troubles, and you know, there's been a lot of things said about even on this very podcast about how David Ellison should move out of the state. Hey, maybe this is a signal that California is open for business and that people should stay in the state of California. What are your thoughts on that, Grayson?
Well, you went to Napa and drank too much wine before we recorded this. If that's what you think the answer is, no. California is not open for business. And last week we said David Ellison should move to Texas. And lo and behold, I believe it was CNBC this week that said he's seriously considering, even might possibly have a site lined up. So again, I will say, Mr. Ellison, sir, go to the Lone Star State. They want you. Call the bluff.
Rich was upset that this site that they identified in Austin was close to a landfill. So I know on our next trip there, we're going to check that out for Rich. But let's get back to the CPUC because again, my confusion here — sorry to perhaps ask the question a third time. This is not because I'm questioning your answer, but aren't the Teamsters suing to shut down the truck side of things? So does CPUC not handle the truck side of things? And like, just because they're friendly to Waymo, does that mean that there's any help maybe on the trucking side of things where obviously Teamsters have been having a recent impact?
The way trucks are regulated is it's over 10,001 gross pounds. And so that's what Teamsters are targeting — vehicles over 10,001 gross pounds. No matter how the courts rule on the Teamster issue, it will have no impact on Waymo in the state of California.
Okay. So now let's move on to the airports because I think the airports are included. I think Waymo is now the only AV company with a CPUC approval for these airports. Does this mean that we're going to get out of having to walk 20 minutes or go to these kiss-and-fly lots in San Francisco, or is there still another administrator of sorts at the San Francisco airport that's still preventing us from getting a convenient pickup of our Waymos?
It's San Francisco. There's another San Francisco treat. Okay. So there's this regulator, this regulator, this regulator, this regulator, this regulator. You have to get all the approval. There has not been any public filings, any committee hearings for the SFO airport on Waymo moving closer to curbside pickup. No, they have the legal authority to operate at the airport through this California Public Utilities Commission, which they're now at the Kiss and Fly, which is too far. Reminds me of that guy that goes, 'the rent's too damn high' in New York. So I'll channel him and say the walk's too damn far. So hopefully — but they have to get another approval to be able to go curbside. A lot of complexities in this. And Omega surfaced some really interesting data looking at the airport correspondence from two and three years ago from all the major airports in California. I'll just put it this way: this is going to be very, very difficult, especially LAX, who said in a public letter to the city council they do not want autonomous vehicles at their airport.
I mean, I do have views on why the rent is too damn high in New York, but I don't want to digress on this podcast. One last question. Now, you know that being a telco guy and seeing wireless markets build out, I'm always about like, look at the top — it's either top 50 markets, top 25 markets, and maybe NFL cities are obviously another important one for us. If you look in the top 20 or 25 markets, Waymo's got something going in every market except for one — our friends that live in Riverside and San Bernardino. Waymo has said nothing about this. Is it possible now that this CPUC approval will finally get Riverside-San Bernardino on the board for Waymo? At least to start to prep this market?
Legally, yes. Plausibly, I would say no. This is outrageous. This is the 12th largest city in America. What is wrong? There's something — someone must have pissed somebody off in senior management at Waymo. Why can't the people of Riverside get a Waymo service?
I don't know. And since you're out there, and I'll just say this in my opinion — I have no nothing — but I could see it operating in the Coachella Valley where Coachella is, in Palm Springs, before operating in Riverside. You know, there was a couple of people — I'm going to digress a little bit here for a moment — from California that were able to stop a Micron plant development right outside of Syracuse, New York. I think we need to do the same in reverse. We need to start up a campaign somehow to get Waymo and a letter-writing campaign to expand their service in Riverside. I will let it go. Now, you know where they did go online this week and what did become the 10th market for Waymo, which is Houston. Here in New York, we call it H-town because that's how it's spelled. But Waymo opened in Houston to all riders. They have this interest list that I think had whatever it was, 100,000 riders off this interest list since this original February launch. Obviously, this is interesting to me. It's interesting especially because — are people listening to the podcast? Because last week we were talking about, maybe it was two weeks ago, how Uber and Nuro should perhaps pivot to opening up in Houston, excuse me, you know, to get things going. Maybe Waymo wants to front-run them there and establish this presence before perhaps Nuro, Lucid, and Uber get on the board. What are your thoughts?
Well, a little bit of history. Hon is a street. Houston is a city named after the founder Sam Houston. And if you go by The Woodlands, you see this 40-foot statue of Sam Houston on your way into Houston. I have been in Houston. Waymo was very generous to put me on the early rider list, and I rode around in a Waymo several times in April. Really good service, really happy with it. Yes, I think this could be considered a move of Waymo getting ahead to meet a deadline that Nuro, Uber, Lucid has to launch paid — I said paid commercial service. They could say, 'Look, well, we're in Houston,' because let's not forget Nuro historically has had a presence in Space City over the years. Or it's hot in Houston, as Iggy Pop once said, so maybe his autonomy is hot in Houston.
I mean, I've been to Houston. It is very hot. I hope those air conditioners are working well. And I guess it's the Jags that they're putting in that market. There's another hot city, maybe not as hot — San Antonio. They were on that list that was published, I think, back in February of like an interest list. You think that's the next city that we're going to see pop out with for Waymo?
Yes, I think that San Antonio most likely will become the next city. I'm sorry to the folks in San Antonio. The Knicks will get another title before you get your next title there. I said that. But the sad part is, even though the Knicks could win another title, they're not going to get Waymos in New York. And I say that, yes, because of the environment and also the capital investments Waymo and their partners are making in the depot infrastructure. Starting to see some really interesting things there in Omega about Waymo's growing footprint in that city. And then I guess the last thing on there is they're not doing freeways and airports there. I know in Dallas I think there's some testing at Love Field, but in Houston, is there any freeways or airports that are happening?
Since you've called Houston, I'm going to put my hip-hop hat on and call H-town. And so we've got all sorts of names for that. We do not have any confirmed or unconfirmed photos or reports of Waymo testing at the Houston airport. We do have local media reports — this is cited to local media — where Waymos have been spotted testing at the San Antonio airport. Nothing at Houston. That's George Bush and the other one. Nothing yet.
Okay, Grayson, you have a clout hat. You've got a clappy hat, and I think you're going to need to put on one of those hats that they wore in Odyssey to protect yourself because I'm coming at you. You have talked about the Ohmni, which is really a Zeekr, a Chinese-built car, as being an unforced error. But what we had this week is that on Wednesday, Ohmni was open to all riders in San Francisco, Los Angeles, and Phoenix. You can't pick — I don't think you — I think some people can pick and some people can't. Hopefully we can. We're on that list. But ultimately you will be able to pick, I think, your vehicle, which obviously both of us agree with. I think it sounds like there's 300 — I think there was one press report — 300 of these Ohmnis already in commercial operation. I don't know if that means they've redeployed Jags elsewhere. They're talking about Denver, Vegas, and San Diego later this year for these Ohmnis. So maybe this is not the unforced error that you thought it was going to be in our earliest episodes of the Autonomy Markets podcast.
I still think it is an unforced error. And Forbes did a good report on the customs imports. I went and pulled customs data. It is public data, and there has been a decline in Zeekr imports to the United States. And I am under the belief, based on the data that Omega has uncovered, that perhaps the Ohmni is a bridge vehicle to the Ioniq 5. And I stand by my statement that it was an unforced error. When and how that unforced error becomes a reality, I'm unsure. But I still view that it's an unforced error. And furthermore, I'm going to go into telco land. The Google Pixel phones are leaving China. The Nikkei is reporting they're not going to be made there anymore. They're going to Vietnam. So Alphabet's moving the phones out of China. Come on. Come on.
Keep that — don't change the topic and keep that helmet on because I'm coming at you again. What I'm really interested in is we debated — you know, I like this design of the Ohmni. It reminds me of a London taxi. As I've mentioned before, I'm rather tall, so the extra leg room is fine. I like to talk to people in a car. Whether it's shared — I don't want to share it necessarily with someone. So I'll agree with you on that point. I'm very interested to see if riders are going to like this design on the Ohmni.
The feedback on X has been mixed. There's been some very harsh feedback. There's been some very positive feedback. But I'll give credit where credit's due. Waymo is engaging and saying, 'Thank you for the feedback and privately message us.' And so they're taking the feedback with stride. And hopefully — you know, I have not been for a ride in an Ohmni. Maybe next week I'll go for a ride in an Ohmni. I have not been for one. I like to experience it. It is not a luxury product. It is a durable product with a lot of enhancements in there, but we'll see over time. Now, there is obviously, I think, a big tax on this car, but it's lower. And I'm starting to see in the mainstream media and on Twitter some recognition about the reduction in cost on the sensor stack. I also noticed that I think it was the CEO of Hyundai is talking about really ramping up capacity in the US, which would be another step down in cost. And yet there's still people out there talking about like, 'Oh, how are you going to deliver a burrito in a $125,000 car?' with no recognition of the cars that are already in the pipeline and the vehicles that have not yet been announced. And you know, it's gone quiet, but I still believe that Waymo's got some more tricks up its sleeve in terms of additional vehicles and sensor stacks that are going to drive the cost of that vehicle even lower. Advertise that over however long you think this is going to be — 500,000, a million miles on a per-mile basis. We have Uber themselves saying the utilization on these things is much higher than a human driver. And you can do the math on how that economics work. But maybe some people just don't want to do that math, perhaps.
And I will say for the record, the one thing I can guarantee you, the Waymo vehicle is not going to drop a burrito out of the sky into the pool. It's not going to do that. Now, what Grayson is talking about is allegedly — because someone in my Twitter feed said, 'No, that's AI.' I don't think it was — but an Amazon drone dropped a package into someone's pool. I'm going to blame it on that person. But you know, that wouldn't have happened with Zipline, I don't think, because it at least would have hovered there until someone came over and got it. But yeah, drones will be a part of our coverage over time. The other interesting thing about this Ohmni is they actually showed in the video how the — and this is something you and I have done when we've ever gone to the depot. That's the first thing we do is like look where the compute is, how much cooling there is. So they introduced this bespoke silicon chip for the Ohmni. Is this the next wave? I mean, we've seen this happen in compute already where, you know, people are worried about supply and developing their own custom chips for the AI task that they have at hand.
Well, the bottom line is higher performance, lower cost. And in the official press release — and I'll give Waymo's comms team a lot of credit — we like to thank our partners that we use throughout the ecosystem: Nvidia, AMD, SanDisk. And when the writing was on the wall, they're going their own chip because it's unlocking performance and it's also lowering costs. You hit the nail on the head. Tesla has their own AI chip. Waymo now has their chip. Let's call it Chip Waymo. And over time, in order for companies to compete, I believe robo-taxi companies are going to have to do their own silicon. Now, who's the next domino to drop to verify this theory? Zoox. Zoox do their own silicon. I say that because they have Amazon's backing. That's something to watch if this does become a trend.
I think Zoox needs to worry about getting their cars to work before they worry about the silicon. I don't think that's the gating factor for them. One last thing in terms of markets that Waymo's not in: New York City is one of them. On Twitter, someone pointed out one of the reports that was used in New York City — surprise, surprise — was effectively taking data out of context. And so just check out my Twitter feed if you want more info there. But I don't think that's going to change things. I mean, there's people out there like, 'Oh, it's not about the safety, it's about the jobs.' And like, we can go back and forth on that type of stuff. This report, by the way, was retracted. I mean, if you think about the press coverage the initial report got — this was in Hunter College. Hunter College and Open Plans report. If you think about the amount of press that this thing got when it first happened versus when it retracted, I don't have to explain to anyone or provide the — you know, I think a lot of websites like to do this, like, 'Here's what this person said about this issue, here's what they say.' Obviously silent. It's just sad that you have some cities that are putting, you know, special interests ahead of safety. New York City and New York State being at the top of that list. I'm going to give you a clappy hat for saying the quiet part out loud.
Yes. Mrs. Piecyk, I'll say it this way: it's bull donkey dust. It's not polite. It's morally and ethically wrong to put special interests over the wants and needs of your citizens. And as we've seen, and I'll say this to the audience, and if you follow me on X — Walt calls it Twitter, that the Twitter bird went the way of the dodo bird. It's X, and X marks the spot. And I have a big mouth on there. Always read beyond the headline. There's lots of detail, so always read behind the headline. And I got to give a shout-out. He's not a listener — maybe he is yet. I saw Nas. Yes. Nasty Nas at Hunter College way back in the day. Great show, great performance. Illmatic, incredible album. I'm on a music roll today, Walt, as you're the truth detective. But what happened to Hunter College? They're putting out this filth. I digress. We know exactly what happened. So let's go to Tesla, which Waymo just overshadowed Tesla, which I thought was like — let's go back here for a second. Cybercab. We went to Gigafactory. We saw the line. We've been in the car. We understand the cost dynamics there. They launched this thing — I don't want to say they launched when it first started coming off the line. They get on the earnings call like, 'Oh, we still need to do new testing with the Cybercab.' Like, don't. And at the time on the podcast, I was like, 'All right, maybe if they get —' I made up a number, right? 250,000 miles. How long would it take them to do that given the number of cars? End of the year, we'll see a Cybercab launch. Shockingly — like to me, I was shocked. The market literally doesn't care because it's like the boy who cried wolf at this point. But like basically Uber tells people, okay, if you ride in our robo-taxis or send in a postcard, you can get a shot at the Cybercab launch, and the deadline for at least the submissions is 8/23. Obviously, the launch wouldn't be necessarily the next day because they'd have to send the invite out for someone to come. But I would think again that implies something within a 30 or 60-day cycle, which would put them in September, October. That is now ahead of my timeline. I realize before you come at me, this is ahead of a revised deadline or milestone that I think I've had from before that has been pushed back and pushed back. But is this finally the magic moment where we're going to see more than a handful of Cybercabs in Austin? Can they hit the only benchmark that matters, which is the Autonomy Markets benchmark — 100 commercial cars in a given market, then we give you the checkmark for being commercial. Is this an indication of that happening, or is this going to be another false flag?
The groundwork for this happening is there. And why do I say that? There are posts on Facebook — I'm not on Facebook, but I get the data — of first responders, fire departments around Austin meeting with Tesla, and Tesla is bringing the Cybercab to them. They're getting training on how to interact with Cybercab. Tesla is not going through first responder training unless something is happening. And you say, 'Oh, Grayson, you're pontificating.' No. We had photos from Miami two weeks before Tesla launched robo-taxi of first responders in Coral Gables, Miami, meeting with Tesla, looking at the Y Cybercab robo-taxi. So it's happening, and now when it does, we're going to go. But the big question the audience wants to know, that I sure as heck want to know: are you going to get dressed up like Willy Wonka? I don't know if I want to do that, but I am hoping that we get an invite sent to us. If we don't, that's fine. Whenever it launches, it launches, and then we'll just head down there anyway, you know, to count some cars and make sure there's 100. And maybe we just need like one of those — you know how they have the giant checks, like when you win the lottery? We need like a giant checkmark. We'll find like one of those graffiti things in Austin, or the 'Austin is Weird' or whatever it is. And we'll put the checkmark on it and we'll say, 'You finally passed 100 cars. You have a commercial market.' What do you say?
